double-declining-balance depreciation

A method of calculating depreciation expenses at an accelerated rate, in which the depreciation expense is highest during the first period of the depreciation period and progressively lower in each additional period.

The basic formula is:

Current Depreciation Expense = (Cost Purchase - Total Depreciation from All Other Periods)*2/Depreciation Period

If Cost Purchase - Total Depreciation from All Other Periods - Current Depreciation Expense< Salvage Value, then

Current Depreciation = Cost Purchase - Total Depreciation from All Other Periods - Salvage Value

For example, if the depreciation period is 3 months, the purchase price is $1000.00, and the salvage value is 200, the depreciation expense for the first month is $666.67. The equation is:

(1000 - 0)*2/3 = 666.67 (Note that total depreciation from all other periods is 0.)